Penn State and UCLA have become the inaugural partners in Elevate’s newly unveiled $500 million College Investment Initiative, according to three individuals familiar with the situation.

Accordingly, the two Big Ten institutions have emerged as the first known universities to formally embrace private capital as a means of funding their athletic departments—signaling a significant milestone in the growing convergence of institutional capital and intercollegiate athletics.

Elevate formally introduced its college sports fund on Monday, revealing that two universities had already committed, but withholding their names. The fund is backed by private equity firm Velocity Capital Management and the Texas Permanent School Fund, a special-purpose government corporation that supports the state’s schools. In a telephone interview, Elevate chief business officer Jonathan Marks declined to confirm the schools, but said they would be announced in the coming weeks along with potentially others.

After the story was published, a UCLA spokesperson said that while the school is currently partnered with Elevate for ticketing, it has not engaged with the new college sports fund. The spokesperson did not provide any additional details about conversations between UCLA and Elevate about expanding its relationship. Representatives from Penn State did not immediately respond to requests for comment.

While neither Big Ten institution had previously been considered a frontrunner in the movement toward private financing, their participation is hardly surprising. Both rank among the top 25 in athletic spending among FBS public universities, per Sportico’s college sports finance database, yet neither enjoys the same financial stability as some of their high-spending peers.

For UCLA, the embrace of private investment comes amid prolonged fiscal distress. Now competing in the Big Ten following the dissolution of the Pac-12, the Bruins’ athletic department has grappled with persistent deficits. Recent NCAA filings show a nearly $52 million shortfall in fiscal year 2024—even after receiving a $30 million campus subsidy. Over the past six years, the program has accrued close to $220 million in debt tied to athletics, highlighting the urgent need for alternative revenue streams.

At Penn State, a similar financial recalibration is underway. In February, the university introduced a slate of new fees—including additional charges on season and single-game tickets, parking and in-stadium purchases—to establish its “Legacy Fund,” designed to support mounting athletic department expenses from scholarships to facility improvements.

Following Judge Claudia Wilken’s final approval of the House v. NCAA settlement last week, Penn State athletic director Pat Kraft wrote an open letter announcing the Nittany Lions’ intention to spend the maximum of athlete revenue-sharing allowable (roughly $20.5 million in 2025-26).

“While change can be difficult, it also can provide new opportunities, and I assure you we will embrace every opportunity this new model creates,” Kraft wrote.

Over the past three years, universities, athletic conferences and private investors have engaged in ongoing discussions as the college sports economy shifts toward a model that increasingly acknowledges and compensates its athlete workforce. In this evolving landscape, it is fair to assume that nearly every Power Four institution—along with a growing number of non-P4 schools—has at least explored the potential implications of incorporating private capital into their athletic operations.

Florida State University emerged as a notable early mover, becoming the first known institution to actively pursue private investment in its athletic department. In 2022, FSU initiated discussions with private equity firms Sixth Street and Arctos Partners under an in initiative internally dubbed “Project Osceola.” While the talks demonstrated significant initial interest and ambition, the effort has yet to yield a formal agreement.

Nevertheless, the initiative served as a clear signal to the broader market: Intercollegiate athletics may be prepared to venture into heretofore uncharted territory to maintain competitiveness in an increasingly professionalized landscape. With the pace of that transformation accelerating, many anticipated a wave of deals—whether through private equity, private credit or alternative financing structures—would soon materialize. Yet to date, such transactions have remained largely theoretical.

In May 2024, RedBird Capital and Weatherford Capital—co-founded by FSU trustee and former Seminoles quarterback Drew Weatherford—unveiled Collegiate Athletic Solutions (CAS), an investment platform designed to deploy between $50 million and $200 million into select major athletic departments. Despite the ambition and capital behind the fund, CAS has yet to finalize or publicly announce any completed partnerships.

Some universities that initially appeared to be strong candidates for private equity investment—such as the University of North Carolina—were ultimately put off by Wall Street’s expectation for immediate returns.

“We have been approached numerous times about different private equity options, but nothing was appealing enough for us to pursue any further,” UNC athletic director Bubba Cunningham told Sportico last August. “The cost of capital for us is fairly low. They’ve got some good ideas and thoughts about some other uses of the capital, but we’re not there yet.”

The Big 12—arguably the most enthusiastic supporter of private capital among the conferences—recently came to a similar conclusion after a year-long evaluation process that reportedly included discussions with global investment firm CVC Capital.

Meanwhile, the Big Ten, which was previously lukewarm on the idea, retained investment bank Evercore earlier this year to begin soliciting preliminary PE pitches.

(This story has been updated in the fourth paragraph with a UCLA spokesperson’s denial of the school’s involvement with the Elevate fund.)